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"You cannot take ESG action without technology."
Wei Lin, Partner and Head of ESG, KPMG China, tells us how technology has enabled and accelerated ESG transformation in China in the past two years.
Meet Wei Lin, Partner and Head of ESG, KPMG China. He talks about how ESG ambitions are ushering in widespread transformation for organizations across China.
How has the ESG landscape evolved since you became Head of ESG for KPMG China two years ago?
Wei Lin: If you spoke to people about sustainability 10 years ago, they couldn’t really pinpoint what that is. Now, and particularly within the last two years, ESG has become much more tangible.
Businesses can clearly see how getting it right creates a competitive advantage and can help to make their business models future-ready. On the flip side, there are increased stakeholder expectations, so if you get it wrong, it can really hurt business.
China and the ESG industry are simultaneously experiencing huge amounts of growth and transformation. How is KPMG China helping organizations through this change?
Wei Lin: Firstly, it’s about making it real for the client. What does ESG mean for them? ESG is such a broad term that it can be an overwhelming experience for organizations who aren’t quite sure where to start. Understanding their industry and the pressures it faces helps to make this achievable. If they are a consumer organization, it could be about supply chain. Similarly, an energy organization could be looking at energy transition.
We then look to quantify the value of a certain engagement, helping clients to understand the impacts of the change – what are the value creation opportunities, the short- and long-term objectives, resources required, and the potential risks and mitigation strategies?
Understanding this helps KPMG professionals work with the client to prioritize. Of course, there is a sense of urgency but in many cases rapid change without prioritization can lead to failure. These initial steps are vital to allow us to develop the correct solutions. It’s what makes the difference for our clients.
What role does technology play in enabling this transformation?
Wei Lin: You cannot take ESG action without technology. Tech is enabling everything from analyzing the reduction of the energy intensity of data centers, through to applications that can help clients measure and track carbon emission footprints.
Take the energy transition as an example. The world is looking at finding new energy sources, storage, transportation, and distribution technologies — all of which require technological innovation to be successful. Look at decarbonization as another example. Companies require a broad range of hardware, software and analytic tools that are deployed in an integrated manner in order to generate accurate and reliable data to measure GHG emissions, inform reduction opportunities, and monitor reduction performance.
Looking at the global operating environment, what other barriers do you see technology breaking down?
Wei Lin: If I look internally first, technology plays a significant role in enabling collaboration, whether that be working with colleagues across the world on a project, sharing best practice, or helping to break down external regulations and what they mean for organizations.
ESG Reporting is another notable example of technology removing barriers. ESG Reporting requires massive amounts of structured and unstructured data to be gathered, analyzed, and presented. All this different data from different sources can lead to big pools of data sitting unused. Harnessing the power of advanced analytics and AI technology would enable data to be analyzed more effectively to inform decision-making and reduce week-long manual tasks to be completed in hours, enhancing efficiency.
Looking at the global operating environment, what other barriers do you see technology breaking down?
Wei Lin: If I look internally first, technology plays a significant role in enabling collaboration, whether that be working with colleagues across the world on a project, sharing best practice, or helping to break down external regulations and what they mean for organizations.
ESG Reporting is another notable example of technology removing barriers. ESG Reporting requires massive amounts of structured and unstructured data to be gathered, analyzed, and presented. All this different data from different sources can lead to big pools of data sitting unused. Harnessing the power of advanced analytics and AI technology would enable data to be analyzed more effectively to inform decision-making and reduce week-long manual tasks to be completed in hours, enhancing efficiency.
And how do people complement AI and robotic process automation? Can you have technology without the people, or vice versa?
Wei Lin: If technology is the enabler, people are the conduit. You can’t separate them — they need to work hand in hand to help clients achieve their ESG goals.
“Technology can achieve an amazing amount, but it does need a human-centered approach and critical lens to realize the most significant benefits.”
Beyond this, the world today is more volatile than we’ve seen in the last 10 or 20 years. People play an important role in maintaining objectivity, looking at the broader context surrounding client issues and harnessing technology to address these. Technology can achieve an amazing amount, but it does need a human-centered approach and critical lens to realize the most significant benefits.
